Economic Growth In Georgia And Countries Of The Region

Economic Growth In Georgia And Countries Of The Region

International Monetary Fund is expecting 4.5% economic growth in Georgia this year, which is 0.3% higher rate compared to the previous forecast.

By the Fund’s forecast, in 2019, economic growth in Georgia will speed up to 4.8%. Moreover, according to the Fund’s estimates, this year in Georgia, inflation rate will be 3.6% and will reduce to 3% in 2019.

In 2017, the world’s economy grew by 3.8%. Last year, the economy of Eurozone grew faster than was expected and according to the preliminary estimates, this trend was retained in Q1 2018, which was manifested in increased employment and improved moods. At the same time, individual disposal incomes and consumers’ confidence have increased.

During the last one year, high economic activity in Turkey created the risk of overheating. According to the National Bank of Georgia, annual inflation rate is within 10% and current account deficit, with the background of high domestic demand, is steadily deepening. The 7% GDP growth is backed by active fiscal stimulus, which creates certain fears in investment circles. Namely, the influential credit agency Moody’s reduced the sovereign rating of the country in early March, which in future may turn out to be a significant obstacle with regard to financing of current account deficit by foreign inflows and complication of external debt service.

By IMF’s assessment, in 2018, Turkeys actual economy will grow by 4.4%.

Ukraine’s economy keeps on slowly improving, however, by the recent information, actual GDP growth last year was better than expected. To 2.5% growth greatly contributed high state expenditures and investments. For 2018, IMF kept the actual GDP forecast unchanged, at 3.2% level. Last year, consumer price inflation fluctuated on two-digit level and, by current forecast, will be slightly over 10%.

IMF left unchanged Russia’s 2018 GDP growth forecast. After achieving the all-time low inflation rate (2.2%) in February, in March, the consumer price index increased by 2.4% and by IMF current forecast, will reach slightly higher level by the end of 2018.

By the recent data, Armenia’s economic activity in Q1 2018, compared to significant growth indicator registered at the end of 2017, has slowed down. This was mainly caused by reduction of growth speed of industrial sectors, while service sector is still significantly growing. The IMF’s renewed forecast for Armenia’s annual economic growth is 0.5% higher than the previous forecast and is 3.4% in 2018.

Due to drop of international oil price, economy of Azerbaijan recessed in 2015-2016. In 2017, actual DGP growth indicator turned positive (0.1%) and will also improve early this year. IMF’s forecast for actual GDP growth in 2018 increased from last year’s 1.3% to 2%.

Forecast for Georgia is one of the highest among the countries of the region, only lagging behind Uzbekistan and Turkmenistan.

Forecast for the countries of the region is following:

Russia – 1.7%

Kazakhstan – 3 .2%

Uzbekistan – 5%

Azerbaijan – 2%

Turkmenistan – 6.2%

Ukraine – 3.2%

Belarus – 2.8%

Georgia – 4.5%

Armenia – 3.4%

Tajikistan – 4%

Kirgizstan – 3.3%

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